Indemnity insurance

The anticipated deluge of law firms entering the assigned risks pool has not materialised, but the numbers are still large, Legal Futures can reveal. But they will fall over the next month as firms can backdate their insurance if they find it by the end of October.

The Law Society and broker PYV have today launched a scheme designed to assist law firms which are having difficulty securing professional indemnity insurance renewal terms by working to improve their risk profile.

The Equality and Human Rights Commission is host a meeting between the Law Society, black and minority ethnic solicitors, and professional indemnity insurers in a bid to agree a plan of action to improve insurers’ equality practices. It was called in after the Law Society judged insurers’ response to examples of alleged discrimination in the 2009 renewal process to be “wholly inadequate”.

The Council of Mortgage Lenders is investigating the case for making title insurance compulsory for all conveyancing transactions, it has emerged, as a Law Society committee said it should be looked at as a way to reduce solicitors’ professional indemnity insurance premiums.

Almost half of the law firms in the assigned risks pool (ARP) still owe premiums running to millions of pounds, although the ARP enforcement strategy has encouraged some to pay up, it has emerged.

The Law Society has squeezed a minor concession out of the unnamed professional indemnity insurer to whom it complained about giving solicitors just seven days to accept quotes.

Quinn Insurance has finally confirmed that it will not be offering solicitors professional indemnity cover for 2010/11. But ex-Quinn sole practitioners will be boosted by the deal done by Legal Futures Associates Travelers and Prime Professions to offer most of them cover.

Solicitors facing disciplinary proceedings after 1 October will no longer be able to call on their indemnity insurance to pay their defence costs, after the Legal Services Board approved changes to the indemnity rules. The decision comes despite strong opposition from the Law Society.

A new insurer today entered the professional indemnity market for small law firms, having taken over the run-off claims-handling function of the Solicitors Indemnity Fund.

The Solicitors Regulation Authority today announced a major crackdown on law firms in the assigned risks pool, with firms unable to exit the pool at the end of their term or to pay their premiums likely to be closed down.

When the profession ditched the Solicitors Indemnity Fund (SIF), a compelling reason for the move was that many good firms were paying for the failures of the few. Now, a decade later, solicitors are back in exactly the same position. Only, the ‘few’ could become substantially more over the next few months.

Professional services firms (PSFs) have managed to overcome the potential decision-making “paralysis” inherent in the partnership structure, new research has found. It said the partnership model can often complicate decisions, with non-contentious issues quickly flaring up to the point where they threaten the retention of partners.

Many conveyancing law firms are ill-prepared to comply with anti-money laundering obligations despite property being the number one target of criminals seeking to invest the proceeds of crime, a leading expert in the field told an AML conference in London last week.

High street solicitors must adopt an attitude of suspicion and paranoia to avoid becoming “collateral damage” in police efforts to clamp down on fraud, an anti-money laundering (AML) conference in London heard last week.

Suspicious activity reports submitted by solicitors have led to the successful prosecution of frauds worth millions of pounds, according to the Serious Organised Crime Agency.